A full dining room can still produce a weak bank balance.
That sounds impossible until you look at the cost stack. Sales can hold while food, labor, and utility pressure keep climbing. Operators on r/smallbusiness and r/restaurantowners have described exactly this: busy store, no breathing room.
This guide gives you a weekly triage system you can run in 15 minutes.
Quick Summary
- Use five numbers weekly, not one monthly P&L surprise
- Track prime cost, contribution per labor hour, and delivery net kept per order
- Fix leaks in menu, labor, and channel before blanket price hikes
- Use hard stop thresholds so decisions are automatic under stress
Why This Pattern Is Common Right Now
| Signal | Latest reading | Operational impact |
|---|---|---|
| U.S. food services + drinking places sales | $96.259B (Nov 2025, NSA) | Revenue can look strong at topline |
| CPI food away from home (12 months to Jan 2026) | +4.0% | Menu costs keep grinding upward |
| CPI full-service meals (12 months to Jan 2026) | +4.7% | Competitive set is repricing |
| CPI electricity / utility gas service (12 months to Jan 2026) | +6.3% / +9.8% | Utility-heavy kitchens get squeezed fast |
| Avg hourly earnings: food services and drinking places | $21.08, up 3.6% YoY | Labor baseline moved again |
| NFIB top problem: inflation / labor costs (Jan 2026) | 18% / 11% | Small operators still reporting margin pressure |
Topline can be healthy while unit economics deteriorate. That is the trap.
The 15-Minute Friday Margin Triage
Run these five checks every week, same day, same time.
1) Prime Cost %
Prime cost % = (Food cost + Loaded labor cost) / Net sales x 100Simple zones many operators use:
- Under 60%: usually workable
- 60-65%: watch zone
- Over 65%: active intervention zone
Concept and rent still matter, but this gives you immediate direction.
2) Contribution per Labor Hour (CPLH)
CPLH = (Net sales - Food cost - Packaging - Variable channel fees) / Labor hoursIf CPLH drops two weeks in a row, you likely have a menu or staffing problem, not just a “slow week.”
3) Delivery Net Kept per Order
Delivery net kept = (Delivery sales - Platform fees - Merchant promos - Refunds) / Delivery ordersIf delivery net kept is far below pickup net kept, your app menu strategy is subsidizing convenience.
4) Top-10 Item Contribution Rank
For each top seller:
Item contribution = Selling price - Plate cost - Variable channel costIf a top-3 volume item sits in your bottom contribution tier, fix it this week. Do not wait for month-end.
5) Cash Conversion Gap
Cash conversion gap = Expected cash from operations - Actual bank movementLarge gaps can indicate discount leakage, refunds, timing delays, or statement surprises.
Monday Fix Plan: Three Moves, No Drama
When triage flags red, do one move in each lane:
- Menu move
- Reprice or re-portion the weakest high-volume item
- Labor move
- Align prep and station coverage to real demand windows
- Channel move
- Raise delivery-only weak items or reduce merchant-funded promo depth
Three small fixes beat one panic overhaul.
What Owners in the Field Keep Saying
Community threads show the same pattern:
- “Revenue is up but survival still feels tight”
- “Price increases feel risky but margin keeps slipping”
- “Delivery volume is high but payout feels thin”
Treat those as operational signals, not emotional noise. If many operators are reporting the same pain, your baseline assumptions are probably stale.
15-Minute Weekly Checklist
- Pull weekly net sales, food cost, and loaded labor cost
- Compute prime cost % and compare to your threshold
- Compute contribution per labor hour
- Compute delivery net kept per order by platform
- Rank top 10 sellers by contribution, not sales volume
- Pick one menu fix, one labor fix, one channel fix for next week
FAQ
Should I do this weekly if I am a single-location owner?
Yes. Single-location operators need faster feedback because one bad month hurts cash quickly.
What if my sales are up but cash is down?
Check delivery net kept, discounts, and refunds first. Then verify labor scheduling against actual sales windows.
Is prime cost enough by itself?
No. Prime cost is necessary but not sufficient. Pair it with CPLH and item-level contribution.
When do I raise prices?
After triage confirms where leakage is. Raise prices surgically, not across the board.
KitchenCost helps owner-operators track item contribution and update cost assumptions quickly, so “busy but broke” does not become your default operating mode.
Related Guides
- US Restaurant Prime Cost Calculator
- Restaurant Labor Cost Percentage Guide (US)
- US Restaurant Pricing Audit Checklist
- US Menu Price Increase Calculator (2026)
Sources (checked on 2026-02-14)
- FRED: Retail Sales - Food Services and Drinking Places (MRTSSM722USN)
- BLS CPI News Release, January 2026 (published February 13, 2026)
- BLS Table B-3: Average hourly and weekly earnings (Food services and drinking places)
- NFIB Small Business Optimism Index, January 2026
- Reddit: r/smallbusiness - “Are you surviving?”
- Reddit: r/restaurantowners - “Are you raising your prices?”